China has used green bonds to help build new coal-fired plants to replace older, dirtier stations on the grounds it reduces nitrogen-based emissions causing the country’s oppressive air pollution. But it announced in Decemberit would no longer consider “clean coal” plants – which still emit significant amounts of greenhouse gas – investments in green technology.

“If you were committed to meeting the goals of the Paris climate agreement, which the Australian government says it is committed to, this is just lunacy,” Kidney says.

“No investors in the western world will accept any green bonds that incentivise anything like coal station retrofits. From an investor’s perspective, coal is a dead duck.”

Emma Herd, chief executive of the Investor Group on Climate Change, says Australia is moving acrossthe trend by considering giving taxpayer support to coal. In addition to the potential support through the climate solutions fund, the government is considering underwriting the cost of building new coal-fired power stations.